I have frequently blogged about cloud computing starting nine years ago (see: Finally, A Clear Definition for Cloud Computing). During the course of these nine years, I have also suggested periodically that healthcare IT lags about a decade behind that in most other industries (see: The Potential for "Serverless" Healthcare Computing). It thus seems reasonable that we should now begin to see articles discussing the adoption of cloud computing in healthcare. Along these lines, a recent article predicted that hospital datacenters would be extinct in about five years (see: Hospital datacenters: Extinct in 5 years?). Below is an excerpt from it:
Some enterprising providers and payers, such as the Centers for Medicare and Medicaid Services and Children's Mercy in Kansas City, are...reaping big dividends from hosting data and services in the cloud. The Centers for Medicare & Medicaid Services, for instance, created a cloud-based analytics platform that eliminated $5 million in underutilized infrastructure spending....And Children's Mercy uses Microsoft's Azure Cloud services to host an app and data that literally save lives of at-risk pediatric patients by tracking them after they leave the hospital, according to Richard Stroup, Children's Mercy director of informatics. What's more, Stroup explained that putting the app on Microsoft's cloud also enabled it to make the service available to other Children's hospitals. Seattle Children's was the first to tap into it, and Cincinnati Children's signed on to use it in February. The notion of a widespread migration to the cloud is not entirely new. Nicholas Carr wrote a 2003 Harvard Business Review article titled "IT Doesn't Matter," in fact, that sent a virtual shock wave through the enterprise technology realm — though few in healthcare probably felt it back then — by suggesting that IT is going to be commoditized...."When you're the last man standing with a datacenter, and your competitors are using that capital to generate revenue, the upside of moving to the cloud will become crystal clear," ...[a hospital IT executive] added....[T]he industry is poised for a seismic shift in its thinking about putting health data in the cloud. Carolinas' CIAO...said the system is making big movements into the cloud, and that includes Cerner, Epic, Microsoft 365, among many other apps. BIDMC's [CIO John] Halamka, meanwhile...that healthcare organizations at this point have to plan for a federated approach, even those that are moving to a single EHR.
A good way to launch this note is to list some of the reasons why I think hospital CIOs and other executives have been slow to embrace cloud computing:
- The healthcare industry, in general, tends to be more conservative because it is highly regulated. Moreover, scientific and technical innovations bubble upward from hospital physicians rather than downward from executives who tend to be focused on budgetary and M&A issues.
- For about the past ten years, hospital executives and physician leaders have been absorbed with the conversion to EHRs rather than other strategic issues. Moreover, the EHR vendors themselves have not enthusiastically endorsed cloud computing although some have offered remote hosting solutions.
- Concerns were raised over the years by hospital CIOs about cloud security and performance of cloud computing but now questions like hacking and ransomware are dominant that could be partly addressed by cloud computing (see: Hospital Records Commonly Being Hacked and Sold for a Premium on the Web; Hospitals and Ransomware; How Should Hospitals Protect Themselves?).
One of the most telling comments from the excerpt above in favor of the conversion to the cloud is the following: When you're the last man standing with a datacenter, and your competitors are using that capital to generate revenue, the upside of moving to the cloud will become crystal clear. I think that hospital executives are becoming increasingly anxious about access to capital. This is partly the result of the new goal for executives of providing services to more patients at a lower cost with less emphasis on bricks and mortar and M&A. One of the ways to accomplish this goal is through telemedicine but most hospitals have not yet adopted the approach as a strategy (see: Telemedicine as a Tool for Physician Visits in Senior and Assisted Living Facilities; Treatment of Patients with Chronic Diseases: Important for the Future of Telemedicine). Another way to free up capital is for health systems to eliminate their datacenters and pursue cloud computing with its highly competitive pricing.